Richism is based on a zero-sum mentality that seeks to associate wealth at the top with alleged wage stagnation at the bottom

It often seems that the greatest skill of the liberal left is to rationalize their resolutely unexamined moral convictions. Among the most prominent of those convictions is that income and wealth gaps are “bad,” both inherently and because wealth equals power, most particularly in the shape of large corporations. Thus what the statists need is more “countervailing” power. The fact that corporations can only become truly dangerous or burdensome through big government – as in Wall Street and auto bailouts — is conveniently brushed aside, much as Karl Marx rejected all criticism of his Communist convictions as “not deserving of serious examination.”

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Marxism turned out to be the most murderous secular doctrine in human history, and yet the Marxist perspective — which is based on a misreading of markets and the exploitation of moral confusion between inequality and inequity – refuses to go away. That’s because it’s based on morally appealing and politically useful assumptions rather than objective analysis.

As Jerry Z. Muller put it in his excellent book The Mind and the Market

“If Marx had one big idea, it was that capitalism was the rule of money — which was itself the expression of greed … This set of ideas was not the conclusion of his years of inquiry into the capitalist economy: it was the never-abandoned premise of the inquiry.”

A recent example of the same hoary assumptions dressed up as insightful analysis is Thomas Piketty’s book Capital in the Twenty-First Century. M. Picketty has already received a pretty thorough going over on this page by my colleagues Terence Corcoran and William Watson, but the fact that his book has been so lavishly praised by the “scribbling set” demands that its flaws be hammered and its shaky moral foundations exposed.

Praise has been heaped on M. Piketty for his scholarship and the vast amount of “data” on which his conclusions are based, but — as the economist Ronald Coase suggested – you can always torture data until it gives up the required information. M. Piketty is in fact a “richist,” which, by analogy to a racist, is someone who holds an irrational prejudice which he seeks to justify by accumulating “evidence.” That’s why Marx spent years in the British Museum.

M. Picketty admits that Marxist immiseration – the notion that capitalism would lead to the impoverishment of the working classes, at least until they were unchained by the Communists – didn’t quite work out. The workers have done pretty well, in fact stunningly well. So he falls back on the alleged threat of growing gaps in income and wealth, and in particular seizes on the scapegoat du jour: executive salaries.

However, as shrewd reviewers have noted, including those on this page, he never really explains why gaps are bad except insofar as they are offensive to primitive egalitarian concerns about anybody getting more than their “fair share.”

Richism is based on a zero-sum mentality that seeks to associate wealth at the top with alleged wage stagnation at the bottom. In fact, insofar as there is stagnation, it is due to a combination of “Communism’s revenge” – the release of those held under Mao’s murderous grip into a somewhat freer and much more productive society, and thus onto world markets — and, in the past five years, the uncertainty created by the revival of Keynesianism and the expensive insanity of green industrial strategy.

The great semantic giveaway of the richist take is that income is never “earned,” and wealth never comes from innovative risk taking. Allegedly overlarge shares of that collectivist “pie” are always “taken” or “appropriated” or “going to” or “received by” or “accruing to” the rich.

The other fundamental assumption of the left – which amounts to a psychological projection — is that “capital” will always use its wealth to subvert the state in its own interests. That might be a danger if wealthy people or top corporate managers really did represent a “class” with common interests, but they don’t.

Some of the most rabid enemies of free markets have been capitalists, from Marx’s co-author Engels through to Bill Gates, who has suggested that capitalism needs to be upgraded to “philanthrocapitalism,” and that corporations should be “spurred,” and taxpayers forced, to support his top-down salvationist ideas. George Soros is another billionaire who funds anti-market ideas. Billionaire Tom Steyer is rabid in his opposition to the Keystone XL pipeline, whose recent further delay hardly speaks to the political power of the fossil fuel industry.

Another obvious knock against claims of the dangerous power of “capital” is that the foundations set up on the basis of the great capitalist fortunes have been captured by the enemies of capitalism.

M. Piketty’s thesis – which amounts to a tautology – is that if the rate of return on capital exceeds the rate of growth, then capitalism’s top hat will loom ever larger over society. But isn’t it capital that creates economic growth?

He claims that “the consequences for the long-term dynamics of the wealth distribution are potentially terrifying,” but he doesn’t say why. Even M. Piketty’s fans admit that his solution to this alleged problem – 80% rates of marginal tax on the rich, along with taxes on capital – are naïve, indeed nonsensical.

In effect he is calling for wealth-destroying taxes to forestall the unrest he is trying to incite.

How anybody can describe his take as “original” or “important” boggles the mind, although it probably is important to remember that it was obsessions with equality that led to the tyrannies of both the Guillotine and the Gulag.